Analysts praised Micron’s long-term contracts, saying they provide some of the strongest revenue visibility in the semiconductor industry.
- MU stock declined nearly 4% in overnight trading, after climbing 16% to a record high in the regular session.
- Micron reported blowout quarterly results Wednesday evening, triggering scores of price target hikes from analysts.
- Stocktwits sentiment for MU remains ‘extremely bullish.’
Memory chip stocks retreated in overnight trading late Thursday after Micron and SanDisk shares hit fresh highs in the session earlier, following Micron’s blowout quarterly report.
Scores of price target hikes from analysts drove MU stock nearly 16% higher, its best move in a month. Shares fell 3.8% in overnight trading, suggesting that some investors booked profits.
Similarly, SNDK stock soared 22% during the day before retreating 1.2%. Shares of Western Digital and Seagate dropped 3% and 1.2%, respectively, in overnight trading.
On Thursday, several brokerages, including DA Davidson, Deutsche Bank and Wedbush, raised their price target on MU stock.
Analysts Praise MU’s Business Visibility
DA Davidson raised the target to $2,000 from $1,500 said that Micron showed that it has some of the semiconductor industry's best sales visibility. The company's yet another blowout quarter and positive forward-looking commentary suggest the memory cycle is far from over, the firm added.
Micron’s report "cleared a high bar, both financially and strategically," Deutsche Bank analysts said. The quarter was "stunning," with favorable pricing dynamics driving revenues and gross margins to "extraordinary levels," said the firm, while raising its price target on the stock to $1,550 from $1,500.
Wedbush, too, highlighted Micron’s strong business visibility, saying that the key takeaway from the company’s report was the unusually detailed disclosure of long-term forward contracts covering a significant portion of bit output, which meaningfully increases visibility into future revenue, margins, and earnings over an extended period.
The firm raised its MU target to $1,400 from $1,300. All of them reiterated their ‘Buy’ calls.
Currently, 38 out of 43 analysts have recommended ‘Buy’ or higher on MU shares, per Koyfin. Their average price target of $1,365.08 implies a 13% upside from the stock’s closing price on Thursday.
Micron’s Q3 Recap
Micron’s fiscal third-quarter revenue increased 346% to $41.46 billion last quarter, handily beating analysts’ expectations of $35.3 billion. Earnings came in at $25.11 per share, beating expectations of $20.28 per share.
The memory chip maker signaled that AI-driven demand and tight supply conditions would persist at least through 2028.
Micron announced 16 contracts with five-year terms, up from just one in the second quarter, and said customers are willingly signing long-term supply agreements amid the prevailing shortage of memory components.
The 16 customers have committed $22 billion in orders spanning data center, consumer and automotive markets, with take-or-pay commitments, cash deposits, and pricing floors designed to lock in supply and protect margins.
Retail View On MU
On Stocktwits, retail sentiment for MU remained ‘extremely bullish,’ unchanged since it reported earlier on Wednesday evening. However, message volume for the ticker went 37% lower in the last two hours.
The sentiment remained ‘bearish’ for SNDK and WDC, while it turned ‘extremely bullish’ from ‘bullish’ for STX.
“$MU these dips can’t be anymore perfectly set out. What a healthy chart. I love how the floor creeps yet allows decent dips for entries,” a trader wrote.
With Thursday’s rally, MU stock is up 325% year to date, and SNDK shares are up 883%.
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